Microsoft focues on youth, reportedly avoids taxes

Updated 10:24 am, Thursday, September 20, 2012

Microsoft will put most of its charitable giving over the next three years into nonprofits that serve young people around the world, the Redmond-based tech giant announced Thursday.

"Our next generation of citizenship will focus on the next generation of people," Executive Vice President Brad Smith said in a news release.

"The global unemployment rate for workers younger than 25 is 12.7 percent, which is double the rate for the world as a whole. This is indicative of a growing opportunity divide between young people who have the access, skills and opportunities to be successful and those who do not. We must work together to close the opportunity divide for youth and help secure the future of this generation and the future of our global economy.

The announcement came the same day as Bloomberg reported on a U.S. Senate committee memo that said Microsoft used transactions with subsidiaries in Puerto Rico, Ireland, Singapore and Bermuda to save at least $6.5 billion in taxes over the past three years.

Senator Carl Levin, a Michigan Democrat and chairman of the permanent sbcommittee on investigations, discussed the report, which also detailed similar legal tactics by Hewlett-Packard, ahead of a hearing Thursday.

"These loopholes and abuses exact a tremendous cost," Levin told reporters at a briefing, according to Bloomberg. "What these gimmicks do is shift the burden of taxes onto citizens and business who don't use armies of lawyers and accountants."

To compete and grow, we operate a global business that requires us to operate in foreign markets. In conducting our business at home and abroad, we abide by U.S. and foreign tax laws. That is not to say that the rules cannot be improved -- to the contrary, we believe they can and should be. U.S. international tax rules are outdated and not competitive with the tax systems of our major trading partners. We believe the U.S. should reform its tax rules to support the ability of worldwide American businesses to compete in global markets and invest in the U.S.

Microsoft's new initiative, Microsoft YouthSpark, aims connect 300 million youth in more than 100 countries with greater opportunities for education, employment and entrepreneurship. The program will include Office 365 for education, free technology tools for all teachers and students, Skype in the classroom to connect students with others around the world and a series of other programs and services.

Microsoft Chief Executive Officer Steve Ballmer said, "Through Microsoft YouthSpark we are making a commitment to help 300 million young people around the world achieve their dreams by focusing our citizenship efforts and other company resources on connecting young people with opportunities for education, employment and entrepreneurship. We believe that working with our partners we can help empower young people to change their world, and we are committed to using our technology, talent, time and resources to do that."

Microsoft pointed to the International Youth Foundation Opportunity for Action report, published in March, which showed that nearly 75 million young people worldwide were unemployed last year.

"As the global youth population continues to grow -- there are more than 2.2 billion people between the ages of 6 and 24 today -- the opportunity divide is widening," the company said.